Boston’s luxury condo market is facing a mismatch between supply and demand: Developers are building condos aimed at the wealthiest buyers, but buyers are looking for a wider range of prices, according to real estate experts and recent data.
While Boston’s population is growing, wage growth hasn’t kept up with the fast rise of prices, according to a recent recap of Boston’s luxury condominium market by The Collaborative Cos.
“Buyers have not been able to fully engage in this new, costlier market,” the report said. “The factors which would traditionally support a fast-absorbing pricing dynamic do not appear to be available for this current supply of product.”
In other words, thousands of luxury units are being built across the city, but sellers may have to lower those prices or risk sitting on unsold condos until the supply-demand imbalance gets restored. The report recommends that a consistent volume of sales can only happen if new residential units are designed with a broader range of sizes and price points.
Record-high sales prices
Total home sales fell over the course of 2019, sending worries through Boston’s residential brokerage community. But at the same time, Boston saw record-high sales prices: The median cost for a condo in Boston was $810,000 in 2019, and average listing prices were $280,000 higher in 2019 than in 2018, said Laura Gollinger, vice president of The Collaborative Cos., who oversees research and design development programs for the Boston-based residential consulting and analytics firm.
“Some people were kind of saying the sky was falling. And in reality, yeah, the absorption was less. But the price points were much higher,” Gollinger said. “The number of transactions was slightly less, but the price points were record-setting.”
For instance, at both the recently opened Four Seasons Private Residences One Dalton Street in Back Bay, and at Pier Four in the Seaport District, some units sold at over $4,000 per square foot. “The city’s never seen anything like that,” Gollinger said.
Some 25,700 units are either planned or under construction across Greater Boston, according to the report. In the Seaport alone, some 1,200 apartments and condominiums are expected to come online within one block of each other, at NEMA Boston, EchelonSeaport, Gables Seaport and the St. Regis Residences, Boston.
EchelonSeaport is a good example of unit diversity: With a price range of $700,000 to $5 million and higher, EchelonSeaport has seen a “brisk pace,” selling around 10 units per month.
This year prices may level off, which could allow wage growth to catch up, said Mike Schlott, president of Kinlin Grover Real Estate, which operates from Cape Cod through Plymouth and Bristol counties.
“The last couple of years I think we’ve seen a more normalization in price appreciation in Massachusetts,” Schlott said. “Hopefully wage growth is keeping up with that.”
The heaviest competition continues to be for homes priced under $1.5 million. In past years, the buyer pool would have been focused on the under $1 million range, Brian Dougherty, managing director of residential brokerage Compass in Boston and head of the firm’s private brokerage division, said.
“The price band under $1.5 (million) is where buyers have to roll up their sleeves and really make a very strategic effort to find a place in core Boston,” Dougherty said.
Dougherty recalled one property, priced at $1.25 million, that recently received 17 offers to buy. “There are for sure buyers that in years past would have been in the mix, and they’re kind of waiting it out, or they’re priced out of the market,” he said.
Boston’s buyers have predominately been locals, Gollinger said, as opposed to Manhattan, which tends to draw a larger pool of foreign investors. As a result, the pool of buyers who can afford an ultra-luxury product is small relative to the city’s entire residential market. In 2019, for all of Boston’s luxury residential buildings, there were just 60 transactions at $6 million and above, Gollinger said. Most of those were at One Dalton and Pier 4.
“As you get larger in terms of your price point, your demand dips,” Gollinger said.
At the ultra-luxury Raffles Back Bay Hotel & Residences, now under construction now at 40 Trinity Place, a majority of units will be priced between $2 million and $5 million. That’s an example of where The Collaborative Cos. is advising developers to not emphasize the top 1% of buyers.
“There’s definitely demand for both new luxury and new mid-luxury,” Gollinger said. “I just caution that, as people are planning new projects, really keeping in mind who the buyer is, because having empty buildings isn’t good for anybody.”
The developer of a 138-unit luxury condominium tower in Boston’s South End says presales activity has been strong ahead of its scheduled completion this fall. The Davis Cos. partnered with the Boston Chinese Evangelical Church and Chinese Consolidated Benevolent Association on the 100 Shawmut condo development, which held a topping-off ceremony Tuesday.
Designed by The Architectural Team of Chelsea with Suffolk as construction manager, 100 Shawmut redeveloped and expanded a 6-story office building into a 13-story, 232,000-square-foot condo tower. The building will feature high-end finishes designed by Embarc Studio and a 13th floor indoor-outdoor lounge.
Advisors Living is the project’s sales agent. Other members of the project team include Copley Wolff Design Group, Howard Stein Hudson Associates, McNamara Salvia and WSP. Construction lenders include M&T Bank, Berkshire Bank, HarborOne Bank, Needham Bank and Bank of New England. The project complied with Boston’s inclusionary development policy by designating BCEC and CCBA as recipient of its affordable housing contribution. The organizations are planning to develop 536 apartments and condos on neighboring parcels, including 26 percent dedicated for affordable housing.
The 13-story, 138-unit condo building at 100 Shawmut Avenue in Boston’s South End officially topped off on March 9, lead developer the Davis Companies announced. The luxury development in a neighborhood peppered with them is expected to open this fall.
Pre-sales have already started at 100 Shawmut, and a release from Davis says that they’ve been met “with strong interest.” But a spokeswoman declined to elaborate.
The development at Herald Street and Shawmut Avenue is due to include 22 studios, 34 one-bedrooms, 23 one-bedrooms with a den, 27 two-bedrooms, 15 two-bedrooms with a den, 12 three-bedrooms, three three-bedrooms with a den, and two four-bedrooms. Eleven of the units will be penthouses.
“We are thrilled to celebrate yet another milestone of 100 Shawmut,” Jonathan Davis, founder and chief executive of the Davis Companies, said in a statement. “This project is a great example of an innovative and sustainable development in what is becoming a new nexus between the Back Bay and South End neighborhoods.”
The 232,000-square-foot 100 Shawmut incorporates the 1920s facade of the office building that was there within a new glass structure. The Architectural Team, based in Chelsea, handled that design, and EMBARC Studio of Boston designed the interiors. Copley Wolff is the landscape architect.
The building’s amenities are due to include a 24-hour concierge, private parking for 112, billiards, a fitness center, a dog-washing station, and a playroom for the kids. A rooftop lounge is expected to include gas grills and fire pits.
In the end, the years-in-the-making project came about through a partnership between Davis, the Boston Chinese Evangelical Church (BCEC), and the Chinese Consolidated Benevolent Association (CCBA).
Davis, as part of advancing 100 Shawmut, is contributing $15 million to a city-controlled escrow account for developing affordable housing at a CCBA-owned site at 50 Herald Street next to 100 Shawmut. That project is expected to hold 313 apartments, 26 percent of which will be designated affordable.
Steel framing is rising for the luxury condo project, 100 Shawmut in the South End. The project will offer 138 homes featuring elegant finishes including white oak wood floors and Silestone countertops. Resident amenities will include a 24-hour concierge service, valet parking, a fitness center, library, pet spa, children’s playroom, and a rooftop sky lounge.
The homes at Pier 4, the Seaport’s premiere luxury condominium, are now closing and ready for occupancy. The Penthouse homes at Pier 4 have sold for prices that had only previously been achieved in Back Bay and Beacon Hill, redefining the geography of Boston’s luxury condo market. One residence that has closed in the Penthouse Collection sold for $15,231,920 and achieved a record-shattering price per square foot of $4,180. As of June 2019, no other residential sale in Boston has ever closed for over $4,000 per square foot. So what are some of the features of these amazing homes in the Penthouse Collection?
Each has its own uniquely designed feature staircase leading to an expansive private roof terrace, equipped with a fully appointed kitchen – perfect for entertaining this Fourth of July
A full-height 99-bottle wine fridge – let your inner sommelier free
Soaring 10’5” ceiling – plenty of room for art and furniture that fits your tastes
Gas fireplaces – ideal for colder winter months
Private balconies with captivating views
Indulgent soaking tub for rest and relaxation after a long day of exploring all that the Seaport has to offer
Another home that sold in Pier 4’s Penthouse Collection also achieved $4,180 per square foot and sold for over $13 million. To put these sales in perspective, the highest sale in Back Bay in 2019 did not cross the $2,700 per square foot threshold. These record sales at Pier 4 showcase the value of new waterfront homes in full service buildings versus inventory in Back Bay and Beacon Hill that has aged and is not fully amenitized.
Missed your chance to tour these amazing homes? Luckily, there are still a few penthouses available, just in time to move in this summer! Register on our website and book an appointment today.
Meet the Archer Residences, 67 very fancy units coming to Beacon Hill in the near future. The Archer’s penthouse, which is currently the most expensive home for sale in the city at a whopping $18 million, is poised to be architectural marvel when it’s completed. Both levels of the home are connected by a floating wood-and-steel staircase enclosed by glass—and the shiny glass accents don’t stop there. Floor-to-ceiling sliding glass doors in the main living area open directly to a rooftop terrace, where there’s a Jacuzzi and an infinity-edge pool.
Advisors Living is proud to announce the exclusive sales and marketing of The Archer Residences in Beacon Hill. The Archer Residences, a boutique collection of beautifully designed condominium homes, offers individualized details and a full-service concierge experience in Beacon Hill, one of Boston’s most desirable neighborhoods. From the magnificent roof terrace to the state-of-the-art fitness and wellness center, valet service, and exclusive indoor parking, The Archer Residences are designed to make life easier.
From The Archer Residences, many of Boston’s greatest attractions are just a short walk away. Feeling the team spirit? Enjoy the Celtics and the Bruins, two of America’s most successful and historic teams, at TD Garden. Or maybe you just want to take a relaxing stroll around the historic neighborhood? The Boston Public Garden, built in 1837, is a beautiful public park that offers boat rides around its swan-filled lagoon. Louisburg Square, a quiet, historic green near The Archer Residences, was once home to many famous 19th century figures, including architect Charles Bulfinch, painter John Singleton Copley, and author Louisa May Alcott.
The Archer Residences features 67 unique residences ranging in size from one to four bedrooms. Each residence has been thoughtfully designed, blending the historic character of Beacon Hill with an elegant hand-selection of materials and finishes.
Click here to schedule an appointment or call us today at 888-749-4805 to visit our sales center today at 20 Ashburton Place. We look forward to showing you what makes The Archer Residences the most exciting residential new construction project in Boston.
488 Dot luxury condos in Southie are scheduled to open to residents this September, emphasizing even more how the neighborhood is drastically changing.
The 33-unit building is not quite a high-rise, but is much different than what was originally found in the area.
The standout features of this new development lie in the phenomenal views, luxury amenities and prime location.
The fourth floor penthouses come complete with private roof decks and all of the units have features to brag about. These include, in-ceiling speakers, soaking tubs, gas fireplaces, heated parking, a fitness center and it is pet friendly.
The location is ideal, right in the center of the evolving Southie neighborhood, within close walking distance to both Broadway and Andrew T stops and surrounded by plenty of dining and bar options.
Southie has undergone a huge transformation in the last decade and Dorchester Ave. is convenient and seeing a ton of new and redevelopment.
The 488 Dot luxury condos are spacious and open, each offering two bedrooms and two bathrooms.
Price for the units range from $650,000 to just over $1 million.